October 3, 2006

 

CBOT Corn Review on Monday: Higher on light speculative buying, wheat

 

 

Chicago Board of Trade corn futures settled higher Monday, benefiting from sharply higher wheat futures early in the session, spillover from stronger corn prices in overnight trade, and light fund buying, sources said.

 

December ended 5 1/4 cents higher at US$2.67 3/4 cents per bushel, and March rose 5 1/2 cents to US$2.80 3/4. e-CBOT day session volume in December was 40,183 contracts.

 

"The contra-seasonal rally in corn continues," said Vic Lespinasse of A.G. Edwards & Sons. There was some light fund buying in corn and it was the first trading day of the month as well as the quarter, he said.

 

Commodity fund buying was estimated at 3,500 contracts.

 

Sharply higher wheat futures provided support early in the session and spillover from Sunday night's gains added some strength, sources noted. December wheat settled 3 cents higher at US$4.46 per bushel after holding double-digit gains early in the day.

 

Trading activity was light compared to recent sessions as some traders were absent for religious observances, a floor trader said.

 

Export inspections were below analysts' estimates and had little impact.

 

The U.S. Department of Agriculture reported corn inspections at 39.774 million bushels for the week ended Sept. 28, below the 42 million-44 million bushels expected by analysts.

 

On open auction technical charts, December settled at its highest level since July 17 and the 14-day Relative Strength Index stands at 66.59. A reading below 30 indicates oversold conditions while a reading above 70 indicates overbought conditions.

 

Buyers on Monday included Fimat, which bought 1,000 December; Fortis, which bought 1,500 December; and Man Financial, which bought 500 December.

 

Fortis sold 1,000 March, JP Morgan sold 700 December, Fimat sold 600 July, and Tenco sold 600 December.

 

Oat futures ended modestly higher, making new life-of- contract highs in two-sided commission house trading. Commission houses were on both sides of the market and there was some hedge pressure, but technically the chart remains positive, a floor source said.

 

December oats rose 1 1/4 cents higher to US$2.07 1/2 per bushel and March finished 3 cents higher at US$2.16.

 

Ethanol futures settled higher in thin activity. October ethanol ended 3 cents higher at US$1.795 per gallon and November gained 1.3 cents to US$1.783.

 

On Monday afternoon, the USDA is scheduled to release the weekly crop progress report at 3 p.m. CDT (2000 GMT). Analysts expect 21%-25% of the U.S. corn crop has been harvested as of Oct. 1.